Tort Reform - Class Action

Overview

Punitive damage awards and class action lawsuits have been cited as factors contributing to the rapid escalation of insurance premiums for both property and liability insurance purposes. As a result, the NAR Insurance Task force recommended in 2004 that NAR increase its involvement with tort reform efforts.

Political Advocacy

Current Legislation/Regulation

None at this time.


In-Depth

Find NAR's letters, testimonies, bill updates, and more on the NAR Federal Issues Tracker


Legislative Contact(s):

Marcia Salkin,
msalkin@realtors.org
202-383-1092

Daniel Blair,
dblair@realtors.org
202-383-1089

Regulatory Contact(s):

Charles Dawson,
cdawson@realtors.org
202-383-7522

What is the fundamental issue?

Punitive damage awards and class action lawsuits have been cited as factors contributing to the rapid escalation of insurance premiums for both property and liability insurance purposes. As a result, the NAR Insurance Task force recommended in 2004 that NAR increase its involvement with tort reform efforts.

I am a real estate professional. What does this mean for my business?

Tort reform has taken on additional importance as real estate licensees have seen errors and omission and property insurance premiums increase sharply and carriers leave the marketplace, in part, due to record jury awards imposed on insurers. In addition, licensees and brokers have seen class action suits brought involving property management practices, environmental disclosures, advertising practices and mortgage lending activities - often filed in courts that routinely approve settlements in which the class members are likely to receive worthless coupon settlements while the lawyers themselves receive large fee awards.

NAR Policy:

NAR policy supports tort reform efforts including the establishment of caps limiting noneconomic and punitive damage awards and standards for the assignment of certain class action lawsuits to federal court.

Legislative/Regulatory Status/Outlook

The most recent changes to tort reform law clarified the standards for the assignment of certain class action lawsuits to federal court. These changes were approved by the Senate on February 10, 2005 on a bipartisan vote of 72-26. House approval came on a vote of 279-149 the following Thursday, February 17, 2005. President Bush signed the bill on Friday, February 18, 2005. In the intervening years, there has been no additional efforts to legislate any other tort reform measures at the federal level.

NAR Committee:

Business Issues Policy Committee

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